Selected Comments at the Groundbreaking Ceremony for the Construction of Office for Administration of the Manhattan Export Processing Zone (EPZ)

In addition to the written text Samdech Hun Sen made comments that are selected here on issues of investment in EPZ, rice cultivation in Svay Rieng and flood situation throughout the country.

… Today, it is my great pleasure to join with all of you for the inauguration of the first special economic zone – Manhattan Export Processing Zone, in the commune of Bati, Chantrea district of Svay Rieng province. It is indeed new achievement of its kind and a model economic creativity of the Royal Government of Cambodia. With Mr. Clemens Young, I first attended the inauguration of the textile factory in Kompong Cham and the groundbreaking of more factory buildings. After that I went to Mehmot on September 5, 2001 in the commune of Tamoung for the launch of cotton plantation as a source of supply to the textile factory.

… As far as the investment project is concerned, I learned that Mr. Young has made significant development and successes in operation such special economic zone in the Phi9lippines before he brought this development to Cambodia. I with to take this opportune moment to express my sincere appreciation for HE Deputy Prime Minister Nhek Bun Chhay, HE former Governor of Svay Rieng Hun Neng and HE Governor Cheang Am as well as staff of the Cambodian Development Council for pooling efforts in making EPZ a reality. Thanks also go Samdech Krom Preah Norodom Ranaridh who co-chairs the CDC with me for the support and encouragement given for this development.

… What do we mean by special economic zone or export processing zone, its by-law, infrastructure, etc? It is true that the EPZ that we put into operation today has taken shape prior to the existence of law, and I welcome the call for speedy approval of such a law by the investors concerned. While waiting for the development of such a law, we could use the current investment law for the sake of this kind of investment. When there is a change in governorship between HE Cheang AM from Kompong Cham to take over from HE Hun Neng of Svay Rieng, I have suggested HE Nhek Bun Chhay to oversee the smooth operation, which in the end led to the construction of office for administration of the EPZ today.

… We are now standing along the Cambodian-Vietnam border. We have now put factories along the border rather than adding them in cities. We have looked instead to favorable condition for export-oriented productions, as EPZ sits right close to export gates. We have now just a few factories in EPZ, but more will come. We want EPZ not only in the province of Svay Rieng but in various other spots along the border with Vietnam, including one more project for Phnom Den zone in the province of Takeo, which is now being studied at the CDC, while consideration is placed upon a number of zones between Vietnam’s Tay Ninh and Cambodia’s Kompong Cham, and that of Cambodia’s Snuol with Vietnam too.

… We also have projects to set up three such zones on the border with Thailand at Koh Kong, Poi Pet and Pailin. Koh Kong and Poi Pet would enjoy the priority to develop into EPZ, maybe similar to that of Svay Rieng today. I welcome idea of making it a one-window-service zone with an aim to abolish bureaucracy relating to issues of trade facilitation from production phase to export, which investors are looking for. In some countries, the Government put in money for purchasing land and placing required infrastructure prior to appealing for investors to come operate in the zone. In Cambodia, that kind of possibility is not in place so private sector has been welcome to invest in developing the above needed facilities.

… As far as infrastructure in concerned, the soft part is legal issue that we have yet to come up with. However the hard part of infrastructural development – water system installation, drainage system, electrical wiring, etc. is the basic requirement deemed necessary by investors. Therefore, factories could be set up not only in cities with existing infrastructures needed, but they can be placed in zone with favorable economic conditions – especially transportation, electricity, etc. The EPZ investment here would reach in steps to US$ 30 million, when in full operation we will have about 15,000 jobs with total export cost of about US$ 300 million.

… What we should all see is that Cambodia has got access to various markets that we have yet to supply them with our goods. As a member of the World Trade Organization (WTO) Cambodia has so much market potential, which some countries have got quite the opposites. Therefore it is indeed a plus if one could look into a combination of the two situations – investors come to Cambodia to produce goods, and make use of Cambodian potential for export, from which both sides will surely benefit. Cambodia will achieve its goal for socio-economic development, while investor will certainly expand their business from such an export-oriented investment.

… I am strongly encouraged because it is a good start that we have here. I understand that it is a heavy work to seek cooperation and mutual understanding between companies and local citizen through help provided by the local authority. Initial development of EPZ encompasses an area of about 240 hectares of land. It was ridiculous to have seen reactions from some people that such an investment would make our people landless. It is the lowest-yield rice producing area of the country where people could grow rice only one time per year. If the yield of rice from this land ever reaches 480 tons of rice per year, this size of land would feed about 240 households. Once converted into industrialized zone, the area would feed 15,000 households, while not including yet taxes incurred by the state.

… However, I would not accept any move to occupy land illegally or to confiscate legal property of the people. The project has so far caused no problems as such. I asked HE Nhek Bun Chhay how much does the land cost per square meter, and he told me it costs US$ 4.9. For an area of one hectare, people could sell for close to fifty thousands dollars, and I am sure our people know quite well what to do for the sake of changing their living style. The same could be observed along the national road 4 from Phnom Penh to Ang Snuol and to Kompong Speu province.

… I have a strong hope to see many investors are present here and for bringing investment to Cambodia, I am sure, you all are looking for two factors – Cambodian internal security and the Cambodian-Vietnamese relation. My response to your concerns is that domestic political stability that is vital to our nation and people has been jointly ensured by the Cambodian People’s Party (CPP) and Funcinpec for not just a few days but for a long time to come. Since 1993, though some divisive issues had been observed, the two political parties are mature for resolving issues for our national and people. Within the framework of a comprehensive strategy between Samdech Krom Preah (Norodom Ranaridh) and me with regard to the partnership between CPP and Funcinpec, as was claimed in its congress, CPP considers Funcinpec its long-term partner, and the current coalition of the two parties is the proof.

… Samdech Krom Preah asked me should we proclaim the partnership prior to or after the election. I responded that we have to declare it before the election. CPP did so in 2003, and its increasing share of votes was partly because of its announcement of partnership in consideration with Funcinpec. Such a move would definitely create confidence to foreign investors and tourists that they would be subjected to no risks caused by political crisis. CPP and Funcinpec are the two arms working together for achievements to be shared by both parties in the Government. What is remarkable in this is that the current Government is a coalition from top to bottom.

… Some people questioned why Samdech Hun Sen raised fund for Samdech Krom Preah (Norodom Ranaridh) for his duty in the Cambodian Olympic Committee. I did mobilize generous fellows for some fund for Samdech Krom Preah when he was elected as the President of the Cambodian Olympic Committee (COC). I told them the question is not who would be the President of COC but would COC be doing its work effectively for the country.

… I also invited Samdech Krom Preah to co-chairs CDC with me and I do not see why it is not productive in doing so for the sake of our country’s advancement. I wish to re-affirm that CPP and Funcinpec need each other for another ten or 15 years at least and anyone who challenges to rule alone would suffer a major strategic loss. We are living in an epoch where gathering of human resource for working successfully is the command.

… Now that I have elaborated on issue of domestic political stability at present and for years to come, in relation to the second concern on Cambodian-Vietnamese relation, I would affirm that we will have more cooperation zone with Vietnam, take for instance we have wired electricity from Vietnam to the provincial town of Svay Rieng, and more of its kind would be wired in through Baavet, Kompong Ro, to Prey Veng province through Kor Andoeuk, to Kandal province through Koh Thom, to Takeo province through Phnom Den, to Kompot province through Kompong Trach, to Kompong Cham though Mehmot, to Kratie province through Snuol. From the Thai side we planned to purchase electricity for use in Koh Kong, Pailin, Poi Pet and O S’mach. We also are looking to cooperating with Lao to wire in electricity to Cambodia.

… Every country in the world applies the method of “cooperation for development” and it is unimaginable if any particular country intends to use force in resolving state-to-state relations. As we have seen here indeed, some investors that are here present came over from Vietnam, and I am happy this will go on. In efforts for investment in socio-economic development, everything should start from internal stability, whereas stable relations in the region and in the world would also be a significant part. In 2004, we had exported a sum of US$ 1.9 billion from the textile sector alone. This place would contribute to increasing size of Cambodia’s export, starting from sport bikes. Investor Clemens Young enjoys a tax holiday for nine years from the EPZ infrastructural development investment. Anyone thereafter wishes to bring in investment, for example a factory into EPZ, where all requirements are in place, will not be tax-forgiven as in the above case.

… Let me turn to agriculture a bit. Svay Rieng suffers longer drought and late rain as many other provinces of the country have started cultivation already. Provinces still suffer insufficient rainfall are Svay Rieng, Kompong Speu, Takeo, and one third of Kandal. I would urge authorities in rainfall lacking provinces to go into preparing a common seedling bed, where our people could sow their seeds, in areas adjacent to water resource. By doing so, we will able to help our people to transplant rice, when rain comes, with rice seedlings that are sowed in the common bed. Otherwise we would face with a situation that our people will sit waiting for rice seedling when there is enough rainfall.

… From Svay Rieng province where there is no seasonal flood, I would like to issue an appeal to the people living along the Mekong Rover, Baasac and Tonle Sab, to be vigilant as seasonal flood in the Mekong River has reached an emergency level as of today. As we observed strong water current this year, I would urge local authorities to keep close watch on our people living along the three waterways while keeping high vigilance and preparing for evacuation from eventual calamities… I wish to say that I would return to Svay Rieng on April 4, 2006 to inaugurate the Svay Rieng University, which would be coinciding with the day of liberation of Svay Rieng from Pol Pot regime.

On that occasion Samdech Hun Sen offered to build three school buildings of 16 classrooms and a School Office of three classrooms to the Bun Rany-Hun Sen College of Chantrea, to build a school building of six classrooms to the Primary School of Thnanh, to donate 50 tons of rice to the village of Puot Leap for labor in deepening a water canal. Along with these HE Deputy Prime Minister and Co-Minister for Defense Nhek Bun Chhay brought two thousand pairs of glasses for elderly people.